Introduction
The Corporate Sustainability Reporting Directive (CSRD) is transforming how large enterprises in Europe approach sustainability metrics. This directive goes beyond traditional financial reporting, requiring detailed disclosures on environmental metrics, decarbonization efforts, and other sustainability measures. Enterprises with significant assets and buildings in Portugal and Spain are facing challenges to meet these new standards while working toward decarbonization goals.
The CSRD applies to large enterprises that meet at least two of the following criteria:
More than 250 employees.
A turnover exceeding €40 million.
Total assets above €20 million.
Listed SMEs are also included, albeit with simplified requirements and delayed implementation. Enterprises operating within the EU, including subsidiaries of non-EU companies, must adapt to these stringent requirements.
The Challenge of Environmental Metrics Under CSRD
Environmental metrics, a cornerstone of CSRD, requires focus on collecting and analyzing data related to electricity, gas, and water consumption, as well as the associated greenhouse gas (GHG) emissions. Understanding the ESRS E1 Energy Data Requirements for reporting is the first step toward creating a successful decarbonization planing. Here are the main challenges enterprises face:
1. Accurate GHG Emissions Calculations
Scope 1 and Scope 2 Emissions: Collecting precise data for Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy) is critical to compliance.
Location-Based GHG Emissions: Scope 2 emissions must reflect grid-specific emission factors for each location. For example, Portugal’s grid relies heavily on renewable energy sources like wind and hydropower, leading to lower emission factors. In contrast, Poland’s grid is largely dependent on coal and other fossil fuels, resulting in significantly higher emission factors.
Scope 3 Emissions: Estimating Scope 3 emissions (indirect emissions from upstream and downstream activities) adds another layer of complexity, particularly for enterprises with large supply chains.
Data Challenges: Setting realistic and measurable targets for energy efficiency and carbon reduction is difficult without accurate baseline data.
Strategic Insights: Enterprises need detailed data on electricity, gas, and water usage to identify inefficiencies and create actionable plans.
Progress Tracking: Without clear benchmarks, it’s challenging to measure and report progress toward sustainability goals.
3. Harmonizing Data Across Regions
Regional Differences: Inconsistent regulatory and market conditions between Portugal, Spain, and other countries make it harder to unify data.
Grid Emission Variability: The variability of grid emission factors complicates accurate Scope 2 reporting. For example, Portugal emphasizes renewable energy, while Spain’s energy mix includes higher nuclear and gas contributions.
4. Complex Data Collection
Multiple Sources: Enterprises often need to gather data from many utility providers across different regions.
Inconsistent Formats: Utility data is frequently provided in non-standardized formats, making it harder to integrate and analyze.
Incomplete Records: Older buildings or remote facilities may lack complete historical records.
5. Alignment With EU Standards
Data Quality Standards: CSRD requires data to be reliable, comparable, and verifiable, which can be challenging to achieve.
Compliance with ESRS: Aligning metrics with the European Sustainability Reporting Standards (ESRS) requires technical expertise and consistent methodologies.
How Builtrix Simplifies Environmental Metrics reporting and Decarbonization planning?
For enterprises with assets or buildings in Portugal and Spain, Builtrix provides a tailored solution to meet the environmental data challenges of CSRD compliance while advancing decarbonization goals.
1. Precise GHG Calculations
Location-Based Scope 2 Emissions: Builtrix uses an up-to-date database of grid emission factors across Europe to provide accurate location-based emissions calculations.
Comprehensive Emissions Tracking: Supports Scope 1, Scope 2, and Scope 3 emissions tracking to meet CSRD requirements with confidence.
Target Setting: Helps enterprises set realistic energy efficiency and decarbonization goals using accurate baseline data.
Progress Monitoring: Tracks improvements and identifies focus areas to meet sustainability objectives.
Operational Optimization: Provides recommendations to reduce energy consumption and associated emissions, leading to significant cost savings.
3. Automated Data Integration
Seamlessly collects electricity, gas, and water consumption data from multiple utilities and regions.
Standardizes data formats to ensure consistency and usability across all assets and locations.
4. Compliance-Ready Reporting
Generates environmental metrics aligned with CSRD and ESRS standards, ready for submission to regulatory bodies.
Ensures data quality, reliability, and verifiability to meet EU requirements.
5. Regional Expertise
Specializes in data collection and analysis for enterprises operating in Portugal and Spain, addressing region-specific challenges such as grid emission variability.
Offers localized support to streamline reporting processes across borders.
Conclusion
Environmental metrics under CSRD present significant challenges, particularly for enterprises like real estate, retail, and hotel chains managing diverse assets across regions like Portugal and Spain. From complex data collection to setting actionable targets, compliance requires a strategic approach.
Builtrix simplifies this journey by automating data collection, providing precise location-based emissions calculations, and delivering compliance-ready reports. With Builtrix, enterprises can not only meet CSRD requirements but also gain actionable insights to drive sustainability and efficiency. Additionally, Builtrix helps companies identify inefficiencies in energy use, offering strategies to reduce energy costs across their assets in Portugal and Spain. For example, by analyzing electricity consumption patterns, Builtrix can recommend operational changes or renewable energy adoption to significantly cut costs while lowering emissions.
Learn more about decarbonization and environmental metrics at builtrix.tech.